Private Equity Tries on the Hard Hat

By

Michael Corkery

April 22, 2013 7:01 p.m. ET

BAYONNE, N.J.—This working-class city's water utility is housed in a dank brick building on a dead-end street. There is no women's bathroom, because the city long ago assumed only men would work here. Some equipment is patched together with duct tape.

Yet Bayonne's water and sewer operations are a key asset in the infrastructure portfolio of KKR & Co. In December, the private-equity firm and French company Suez Environnement...